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NY L84981





May 27, 2005

CLA2-RR:NC:TA:349 L84981

CATEGORY: CLASSIFICATION

Mr. Carlo Bucci
Conformex SA de CV
2927 Blvd. De la Concorde East #207
Duvernay, Quebec
Canada H7E-2B5

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for chair pads; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(2); tariff shift; NAFTA Preference Override; Article 509

Dear Mr. Bucci:

This is in reply to your letter dated May 4, 2005, requesting a classification, status under the NAFTA and country of origin determination for chair pads which will be imported into the United States.

FACTS:

The subject merchandise consists of chair pads. Two samples were submitted. The outer shells of both chair pads are made from a printed 70 percent polyester and 30 percent cotton woven fabric. One pad measures approximately 12 x 14 inches and is filled with a solid piece of polyurethane plastic foam. The edges are finished with strips of self-fabric. These strips extend to form tie stings that are used to secure the pad to a chair. The other pad is stuffed with a loose fiber fill and measures approximately 14 x 15 inches. The pad is sewn through at four spots to prevent the fill from shifting. Self-fabric tie strings are sewn to one end of the chair pad. The manufacturing operations for the chair pads are as follows:

PAKISTAN:
-70/30 polyester and cotton fabric is woven and printed. -fabric is shipped to Mexico.

MEXICO:
-polyurethane foam is formed.
-fiber fill is formed.
-printed fabric is cut to size and shape. -chair pad shells are formed.
-shells are stuffed with fiber or foam and sewn closed. -chair pads are packaged and shipped.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for both chair pads will be 9404.90.2000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: other. The general rate of duty will be 6 percent ad valorem.

The chair pads fall under a subheading that is not assigned a textile category number. Quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information as to whether quota and visa requirements apply to this merchandise, we suggest that you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” available at our web site at www.cbp.gov. In addition, you will find current information on textile import quotas, textile safeguard actions and related issues at the web site of the Office of Textiles and Apparel, at otexa.ita.doc.gov.

NAFTA ELIGIBILITY:

The chair pads undergo processing operations in Mexico. Mexico is a country provided for under the North American Free Trade Agreement. These products will be eligible for the NAFTA preference if they qualify to be marked as a good of Mexico and if they are wholly obtained or produced in the NAFTA territories or transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 9404, HTSUSA, the appropriate subdivision (t) rule states that:

A change to subheading 9404.90 from any other chapter, except from headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516.

When the polyester and cotton blend fabrics leave Pakistan, they are classified in heading 5513 or 5514, HTSUSA, depending on the weight. As fabrics of these headings are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, it would initially appear that the non-originating material from Pakistan does not undergo the requisite change in tariff classification.

It is noted, however, that the Appendix to Part 181 of the Customs Regulations (19 CFR Part 181), which sets forth the NAFTA rules of origin regulations, specifies rules for determining whether certain non-originating materials undergo an applicable change in tariff classification when used in self- made goods. The Appendix to Part 181, Part II, Section 4 ("Originating Goods")(8), states:

For purposes of determining whether non-originating materials undergo an applicable change in tariff classification, a self-produced material may, at the choice of the producer of the good into which the self-produced material is incorporated, be considered as an originating material or non-originating material, as the case may be, used in the production of that good.

The chair pad shells, which are manufactured in Mexico prior to the completed chair pad, are considered a “self-produced material.” On the basis of the foregoing, the producer of the chair pads ("the good") has the option of identifying the shells ("the self-produced material") as non-originating materials. If this choice is made, the chair pad shells (classifiable under subheading 6307.90, HTSUSA) fall within a tariff provision that is not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the chair pads would be deemed as undergoing the requisite change in tariff classification.

Pursuant to the analysis set forth above, the chair pads qualify as an originating good. Accordingly, they will be entitled to the special "MX" rate of duty if they qualify to be marked as a good of Mexico and provided that all other NAFTA requirements are met.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:"

Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section":

HTSUS Tariff shift and/or other requirements

9404.90 Except for goods of subheading 9404.90 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

Subheading 9404.90.20 is not included in the paragraph (e)(2) exception to the above tariff shift rule. The chair pads are made from a fabric that was formed in a single country. As the fabrics comprising the chair pads are formed in a single country, that is, Pakistan, as per the terms of the tariff shift requirement, country of origin is conferred Pakistan.

However, the chair pads qualify as a NAFTA originating good. As stated in Section 102.19(a):

Except in the case of goods covered by paragraph (b) of this section, if a good which is originating within the meaning of §181.1(q) of this chapter is not determined under §102.11(a) or (b) or §102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin (see §181.11 of this chapter) has been completed and signed for the good.

Assuming that the producer opts to identify the shell as a "self-produced material," the chair pads qualify as a NAFTA originating good and applying the terms of Section 102.19(a), the country of origin of the chair pads is Mexico. They will be entitled to the special "MX" duty rate, provided that all other requirements of the NAFTA are met.

HOLDING:

If the producer in Mexico opts to identify the “self-produced material” (the chair pad shells) as a non-originating material, the country of origin of the finished chair pads is Mexico and they will be entitled to the NAFTA “MX” duty rate of Free upon compliance with all applicable laws, regulations and agreements.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 181.100(a)(2). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist John Hansen at 646-733-3043.

Sincerely,

Robert B. Swierupski
Director,

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